This article will explain what a spiff looks like and why it is important to understand.

Let’s first answer the question: What is a “spiff” in sales? Let’s find out what it means:

What does SPIFF stand for?

SPIF or SPIFF is used to increase the success of suggestive selling. It can be described as

• Sales Performance Incentive Funding Formula
• Sales Performance Incentive Fund
• Special Performance Incentive Fund
• Specific price incentive for final sale Special pay incentives for fast sales
• Salesperson Incentive For Fun

What is SPIFF?

A spiff can be described as slang for quick sales bonuses. Spiffs are generally paid to salespeople for selling a product by either the manufacturer or their employer.

Spiff stands for Sales Program Incentive Funds. This is an incentive program that companies use to increase sales. A campaign is launched when commodities aren’t selling well or stock items need to clear or be sold.

A sales sprint can be set up on a sales team to implement a spiff plan to increase sales for a specified period.

These campaigns can last for days, weeks, or months depending on the number of products that need to be moved and the target revenue. Spiff programs allow the sales team to receive cash or other incentives.

What’s a Spiff In Sales?

A spiff can be described as bonus money. Salespeople who reach a certain level of sales are eligible to be awarded “push money.” The campaign ends and the salesperson can cash their reward by providing their sales receipts to verify.

However, this Spiff type is not exempt from tax; the amount exceeding the IRS limit must be reported on a 1099 misc tax form.

No matter what type of incentive program you choose to implement, Spiff will still need your support.

SPIVs and SPIFFs can be more expensive than others. They may also require more time and effort than you are able or willing to invest.

To ensure you make the right choice when offering a spiff program or spiv program to your clients, it is important to consult a third-party expert before you do so.

Sales Incentives

Once you’re familiar with what a spiff is in sales, let’s move on to incentives.

Sales Promotion Incentive Fund may deliver smart TVs, tablets, or smartphones to grab the attention of sales staff.

Incentives will motivate salespeople to push harder to sell difficult-to-move items. Incentives don’t have to be costly; trendy items will work.

These can be label swags, in-store banners, or product brochure displays. They can also be branded apparel.

Participants at Spiff are good at selecting their incentives so why not give them the option of a variety of rewards? The program will run smoothly if participants get into the rhythm of things.

How do They Work?

Spiffs can promote many types of incentive awards. Participants can earn awards if they make a certain number of purchases during a campaign or sell “X” amount of dollars.

Because money is instant gratification, cash is preferred over loyalty points systems. Spiffs are intended to be fun.

In the beginning, spiffs were used for Apple’s launch. IBM used spiff programs to make its brand stronger to the public.

This era offered salespeople incentives to show the benefits of using these computers. If an incentive does not satisfy the employee’s needs, it is a failure to deliver.

A company or product that is great can suffer from failure.

There are also other types of programs:

• Prepaid SPIFF Cards – Giving cash on a card can be a great incentive.

• Open-Ended ProgramsAllow all participants in the program to receive awards

• Closed-End Programs – This type of program requires you to know how many incentives or awards your company is willing and able to give away.

• Salespeople can reach the highest tier and claim the goal they desire if they work hard enough. This program can be referred to as a tier-based award program. Salespeople can receive more substantial and better awards for completing previous goals.

The Benefits of SPIFFs

Let’s suppose you have a short-term goal you need to achieve in a matter of weeks. You can’t always achieve your goals in the end. You can use spiffs if you have a strict deadline to reach a specific goal.

Spiffs can come in many forms, including a gift card or an extra vacation day. It could even be a cash prize!

Spiffs can help:

Many businesses can experience employee disengagement, which can lead to problems. It can also be difficult for employees to stay productive and invest in their sales goals.

Spiffs are a quick reward for completion and have been proven to increase employee participation. They also encourage healthy competition at work.

Spiffs are the best way for your business to reach a deadline. Spiffs allow sales reps and other sales personnel to quickly meet their quotas.

While spiffs are an important part of any sales incentive program they shouldn’t be the main focus. Spiffs may not be the main focus of your sales incentive program. They might instead prioritize other, more important goals. A successful spiff program will help you to attract new customers and increase signups.

The disadvantages of SPIFFs

Spiffs are not perfect. Spiffs should not be used as an extension of mainline incentive programs. Spiffs should be limited to specific business needs.

There are risks and problems associated with spiffs if they are misused.

• Dishonesty Your reps might recommend the wrong solution or product to customers to make a quick buck. To achieve quarter-based targets, they may manipulate numbers by delaying customer signups. It is not a good idea to create an environment where dishonesty pays.

• Routine If you use spiffs a lot (or they look the same), it may be seen as a prerogative, or create a feeling of entitlement. Reps can easily lose interest in incentives that don’t feel special. Spiffs should be limited in time and must be unique.

• Demoralizing Perhaps some of your sales representatives don’t know what to do with the products that are eligible for a spiff. They may prefer to sell products steadily and not rely on spiffs. Some reps may feel demotivated or upset by this process.

• Poorly implemented – If your Spiff isn’t properly implemented, it could lead to some finger-pointing, as goals are not met, which can cause negative feelings.

Additionally, reps may feel cheated if they are not paid correctly.

Why should companies use SPIVs and SPIFFs in their business?

It is easy. To increase profits, companies use spiff programs. Certain merchandise, particularly non-name brands, do not enjoy loyal patronage.

When new brands are introduced to the market, they must be properly introduced to the public. To increase product sales, the manufacturer may offer a percentage to the retailer.

Advertising is not enough. Advertising alone is not enough. There must be an incentive that benefits both the sales team and the store.

This could be a problem for manufacturers if dishwashers that are two years old don’t sell as well as they should. It could also appear that the sales team isn’t trying to sell these dishwashers.

If the merchandise is quickly moved by sales staff, manufacturers offer incentives. The incentives motivate the sales team to offer customers an additional percentage off, free or lower-cost delivery/installation.

You might also be able to get a bigger bundle for the same price. Or, perhaps, a larger bundle of items for the same price.

Conclusion

You must know what a spiff is and why companies use them.

It is now time to implement it in your company. Use this technique now and let us know how it worked for you.